LETTER TO SHAREHOLDERS
Dear Shareholder:
The fixed income markets have come almost full circle since our last
correspondence. In our letter dated December 29, 1994, we stated our
optimistic outlook for 1995. In accordance with our increased optimism, we
extended the average maturity of your Fund. In January, the Fund was
positioned defensively with an average maturity of approximately 2.2 years.
By the end of February, the portfolio had an average maturity of over 3 years
- -- a maturity structure that has benefited the Fund greatly. So, it is with
pleasure that we are able to report a total return of 7.57% for the period of
November 30, 1994 through May 31, 1995.* For the same period, the Merrill
Lynch Governments, U.S. Treasury, Short-Term (1-2.99 years) Index posted a
total return of 6.34%.**
Currently, market prices for short-term government securities include the
anticipation of a Federal Reserve Board easing of 50 basis points. Two-year
Treasury Notes are now yielding approximately 5.85% (compared to a yield of
7.40% on November 30, 1994). With these Notes trading below the Fed Funds
rate, which is 6%, market prices reflect the belief that an interest rate cut
is imminent.
We stated in our last correspondence, "We are of the opinion that the Fed
is near the end of the tightening cycle, and that we should see the results
of higher rates on the economy by the first quarter of 1995. This should make
the last half of 1995 a positive year for fixed income markets." In short,
the market gains that we expected for 1995 have already occurred. At this
time, we feel it is premature to anticipate an extreme amount of interest
rate moves by the Fed. With this in mind, prudence dictates that we keep the
Fund shy of its maximum allowable maturity. During 1995, the average life of
your Fund's portfolio, at its longest, was about 3.2 years. We have since
lowered that to approximately 2.9 years. We accomplished some of that
shortening by moving out of zero coupon notes (U.S. Treasury Principal Strips
of 8/15/98) into shorter-maturity, interest-bearing Treasury securities.
Fundamentally, our views remain consistent with a slowing, low
inflationary economy. As always, we are seeking out the securities that
represent the best value within your Fund's Prospectus guidelines. Because
your Fund does not use any derivatives or speculative trading techniques, it
is important that we constantly reassess what securities represent the best
value, and adjust your Fund accordingly. Currently, we believe that U.S.
Government agency securities look attractive; we anticipate that as the
quarter end approaches, these securities will become cheaper, and at that
time we might look to add to our positions.
In closing, we thank you for investing in Dreyfus Short-Intermediate
Government Fund. We want to assure you that we at Dreyfus will remain
steadfast in our goal of continuing to provide you with an attractive,
quality fund over the long term.
Very truly yours,
(Gerald E. Thunelius Signature Logo)
Gerald E. Thunelius
Portfolio Manager
June 29, 1995
New York, N.Y.
* Total return represents the change during the period in a hypothetical
account with dividends reinvested.
**Source: Merrill Lynch, Pierce, Fenner and Smith Inc. Unlike the Fund,
Merrill Lynch Governments, U.S. Treasury, Short-Term (1-2.99 years) is an
unmanaged index consisting solely of short-term treasury securities. In past
reports, the Fund has misidentified this index as the Merrill Lynch Treasury
Master Index-Short Term.
<TABLE>
<CAPTION>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
STATEMENT OF INVESTMENTS MAY 31, 1995 (UNAUDITED)
PRINCIPAL
NOTES-98.0% AMOUNT VALUE
-------------- --------------
<S> <C> <C>
U.S. GOVERNMENT AGENCIES-4.8%
Student Loan Marketing Association, Notes,
7%, 3/3/1998............................................................ $ 25,000,000 $ 25,597,150
--------------
U.S. TREASURY NOTES-93.2%
9 1/4%, 1/15/1996....................................................... 6,950,000 7,089,000
8 1/2%, 7/15/1997....................................................... 9,000,000 9,466,875
7 3/8%, 11/15/1997...................................................... 93,500,000 96,568,016
8 1/8%, 2/15/1998....................................................... 10,000,000 10,540,630
6 1/8%, 5/15/1998....................................................... 4,000,000 4,020,624
5 3/8%, 5/31/1998....................................................... 31,500,000 30,988,125
5 1/8%, 6/30/1998....................................................... 25,000,000 24,421,875
8 1/4%, 7/15/1998....................................................... 107,000,000 113,904,817
9 1/4%, 8/15/1998....................................................... 120,000,000 131,268,720
4 3/4%, 9/30/1998....................................................... 25,000,000 24,070,325
4 3/4%, 10/31/1998...................................................... 25,000,000 24,046,875
8 7/8%, 11/15/1998...................................................... 15,000,000 16,324,215
--------------
TOTAL U.S. TREASURY NOTES................................................... 492,710,097
--------------
TOTAL NOTES
(cost $505,854,846)..................................................... $518,307,247
==============
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM INVESTMENT-.2%
REPURCHASE AGREEMENT;
<S> <C> <C>
Daiwa Securities America Inc., 6.10%
Dated 5/31/1995, due 6/1/1995 in the amount of $1,276,216
(fully collateralized by $1,250,000 U.S. Treasury Notes,
7 1/2% due 1/31/1996, value $1,293,750)
(cost $1,276,000)....................................................... $ 1,276,000 $ 1,276,000
==============
TOTAL INVESTMENTS
(cost $507,130,846)..................................................... 98.2% $ 519,583,247
======== ==============
CASH AND RECEIVABLES (NET).................................................. 1.8% $ 9,282,884
======== ==============
NET ASSETS ........................................................... 100.0% $528,866,131
======== ==============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
STATEMENT OF ASSETS AND LIABILITIES MAY 31, 1995 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value-See Note 1(b)
(cost $507,130,846)-see statement..................................... $519,583,247
Cash.................................................................... 1,615,311
Interest receivable..................................................... 9,028,400
Receivable for shares of Beneficial Interest subscribed................. 545,917
Prepaid expenses........................................................ 45,674
--------------
530,818,549
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 243,894
Payable for shares of Beneficial Interest redeemed...................... 1,586,242
Accrued expenses........................................................ 122,282 1,952,418
-------------- --------------
NET ASSETS ................................................................ $528,866,131
==============
REPRESENTED BY:
Paid-in capital......................................................... $556,745,301
Accumulated net realized (loss) on investments.......................... (40,331,571)
Accumulated net unrealized appreciation on investments-Note 3........... 12,452,401
--------------
NET ASSETS at value applicable to 48,144,746 outstanding shares of
Beneficial Interest, equivalent to $10.98 per share
(unlimited number of $.001 par value shares authorized)................. $528,866,131
==============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
STATEMENT OF OPERATIONS SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
INVESTMENT INCOME:
<S> <C> <C>
INTEREST INCOME......................................................... $18,745,212
EXPENSES:
Management fee-Note 2(a).............................................. $ 1,223,918
Shareholder servicing costs-Note 2(b)................................. 554,986
Custodian fees........................................................ 37,246
Professional fees..................................................... 24,215
Trustees' fees and expenses-Note 2(c)................................. 21,775
Registration fees..................................................... 20,831
Prospectus and shareholders' reports.................................. 7,566
Miscellaneous......................................................... 4,295
-----------
1,894,832
Less-reduction in management fee due to undertakings-Note 2(a)........ 387,568
-----------
TOTAL EXPENSES.................................................... 1,507,264
-----------
INVESTMENT INCOME-NET............................................. 17,237,948
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments-Note 3:
Long transactions..................................................... $(7,725,518)
Short sale transactions............................................... (73,931)
------------
NET REALIZED (LOSS)................................................... (7,799,449)
Net unrealized appreciation on investments ............................. 26,847,803
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 19,048,354
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $36,286,302
===========
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
NOVEMBER 30, MAY 31, 1995
1994 (UNAUDITED)
--------------- -------------------
<S> <C> <C>
OPERATIONS:
Investment income-net................................................ $ 37,163,216 $ 17,237,948
Net realized (loss) on investments................................... (32,303,079) (7,799,449)
Net unrealized appreciation (depreciation) on investments for the period (8,196,511) 26,847,803
--------------- -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.... (3,336,374) 36,286,302
--------------- -------------------
DIVIDENDS TO SHAREHOLDERS:
From investment income-net........................................... (37,163,216) (17,237,948)
From net realized gain on investments................................ (2,638,189) ---
In excess of net realized gain on investments........................ (229,043) ---
--------------- -------------------
TOTAL DIVIDENDS.................................................... (40,030,448) (17,237,948)
--------------- -------------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold........................................ 395,989,207 118,383,943
Dividends reinvested................................................. 33,895,545 13,961,524
Cost of shares redeemed.............................................. (441,547,884) (119,040,880)
--------------- -------------------
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS............................... (11,663,132) 13,304,587
--------------- -------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS........................ (55,029,954) 32,352,941
NET ASSETS:
Beginning of period.................................................. 551,543,144 496,513,190
--------------- -------------------
End of period........................................................ $ 496,513,190 $ 528,866,131
=============== ===================
SHARES SHARES
--------------- -------------------
CAPITAL SHARE TRANSACTIONS:
Shares sold.......................................................... 35,750,303 11,048,454
Shares issued for dividends reinvested............................... 3,081,701 1,301,148
Shares redeemed...................................................... (40,031,369) (11,171,752)
--------------- -------------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING...................... (1,199,365) 1,177,850
=============== ===================
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
SIX MONTHS ENDED
YEAR ENDED NOVEMBER 30, MAY 31, 1995
--------------------------------------------------
PER SHARE DATA: 1990 1991 1992 1993 1994 (UNAUDITED)
--------- --------- -------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.24 $11.23 $11.71 $11.58 $11.45 $10.57
--------- --------- -------- ---------- ---------- -----------
INVESTMENT OPERATIONS:
Investment income-net............... .99 .85 .82 .78 .76 .38
Net realized and unrealized gain (loss)
on investments.................... (.01) .47 .09 .14 (.82) .41
--------- --------- -------- ---------- ---------- -----------
TOTAL FROM INVESTMENT OPERATIONS.. .98 1.32 .91 .92 (.06) .79
--------- --------- -------- ---------- ---------- -----------
DISTRIBUTIONS:
Dividends from investment income-net (.99) (.84) (.83) (.78) (.76) (.38)
Dividends from net realized gain
on investments.................... -- -- (.21) (.27) (.06) --
Dividends in excess of net realized
gain on investments............... -- -- -- -- -- --
--------- --------- -------- ---------- ---------- -----------
TOTAL DISTRIBUTIONS............... (.99) (.84) (1.04) (1.05) (.82) (.38)
--------- --------- -------- ---------- ---------- -----------
Net asset value, end of period...... $11.23 $11.71 $11.58 $11.45 $10.57 $10.98
========= ========- ======== ========== ========== ===========
TOTAL INVESTMENT RETURN................. 9.20% 12.25% 8.05% 8.29% (.57%) 15.18%(1)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets -- .49% .35% .40% .47% .62%(1)
Ratio of net investment income to
average net assets................ 8.90% 7.41% 7.00% 6.75% 6.91% 7.04%(1)
Decrease reflected in above expense ratios
due to undertakings by the Manager .92% .30% .42% .35% .30% .16%(1)
Portfolio Turnover Rate............. 25.46% 131.69% 225.52% 317.00% 695.60% 271.61%(2)
Net Assets, end of period (000's Omitted) $63,419 $144,215 $333,646 $551,543 $496,513 $528,866
(1) Annualized.
(2) Not Annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company. Premier Mutual Fund
Services, Inc. (the "Distributor") acts as the exclusive distributor of the
Fund's shares, which are sold to the public without a sales charge. The
Distributor, located at One Exchange Place, Boston, Massachusetts 02109, is a
wholly-owned subsidiary of FDI Distribution Services, Inc., a provider of
mutual fund administration services, which in turn is a wholly-owned
subsidiary of FDI Holdings, Inc., the parent company of which is Boston
Institutional Group, Inc. The Dreyfus Corporation ("Manager") serves as the
Fund's investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A.
(A) PORTFOLIO VALUATION: Investments in U.S. Government obligations are
valued at the mean between quoted bid and asked prices. Short-term
investments are carried at amortized cost, which approximates value.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income including, where applicable, amortization of discount on investments
is recognized on the accrual basis.
The Fund may enter into repurchase agreements with financial
institutions, deemed to be creditworthy by the Fund's Manager, subject to the
seller's agreement to repurchase and the Fund's agreement to resell such
securities at a mutually agreed upon price. Securities purchased subject to
repurchase agreements are deposited with the Fund's custodian and, pursuant
to the terms of the repurchase agreement, must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. If the value of the underlying securities falls below the value of the
repurchase price plus accrued interest, the Fund will require the seller to
deposit additional collateral by the next business day. If the request for
additional collateral is not met, or the seller defaults on its repurchase
obligation, the Fund maintains the right to sell the underlying securities at
market value and may claim any resulting loss against the seller.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain, if any, are normally declared and
paid annually, but the Fund may make distributions on a more frequent basis
to comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with applicable provisions
of the Internal Revenue Code, and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income and excise
taxes.
The Fund has an unused capital loss carryover of approximately
$26,610,000 available for Federal income tax purposes to be applied against
future net securities profit, if any, realized subsequent to November 30,
1994. The carryover does not include net realized securities losses from
November 1, 1994 through November 30, 1994 which are treated, for Federal
income tax purposes, as arising in fiscal 1995. If not applied, the carryover
expires in fiscal 2002.
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .50 of 1% of the average
daily value of the Fund's net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, interest on borrowings, brokerage and
extraordinary expenses, exceed 1 1/2% of the average value of the Fund's net
assets for any full fiscal year. However, the Manager had undertaken from
December 1, 1994 through January 30, 1995 to reduce the management fee paid
by the Fund, to the extent that the Fund's aggregate expenses (excluding
certain expenses as described above) exceeded specified annual percentages of
the Fund's average daily net assets. The Manager had undertaken from January
31, 1995 through June 30, 1995, to waive receipt of the management fee
payable to it by the Fund in excess of an annual rate of .36 of 1% of the
average daily value of the Fund's net assets. The reduction in management
fee, pursuant to the undertakings, amounted to $387,568 for the six months
ended May 31, 1995.
The Manager has currently undertaken through December 31, 1995 to reduce
the management fee paid by the Fund, to the extent that the Fund's aggregate
annual expenses (excluding certain expenses as described above) exceed an
annual rate of .75 of 1% of the average daily value of the Fund's net assets.
The Manager may modify the expense limitation percentages from time to
time, provided that the resulting expense reimbursement would not be less
than the amount required pursuant to the Agreement.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation an amount not to exceed an annual rate of .25 of
1% of the value of the Fund's average daily net assets for servicing
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. During the period ended
May 31, 1995, the Fund was charged an aggregate of $361,299 pursuant to the
Shareholder Services Plan.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $4,000 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 3-SECURITIES TRANSACTIONS:
The following summarizes the aggregate amount of purchases and sales of
investment securities and securities sold short, excluding short-term
securities, during the period ended May 31, 1995:
<TABLE>
<CAPTION>
PURCHASES SALES
---------------- ------------------
<S> <C>> <C>
Long transactions................................................ $1,313,051,897 $1,242,959,845
Short sale transactions.......................................... 94,839,031 94,765,100
---------------- ------------------
Total.......................................................... $1,407,890,928 $1,337,724,945
================ ==================
</TABLE>
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
The Fund is engaged in short-selling which obligates the Fund to replace
the security borrowed by purchasing the security at current market value. The
Fund would incur a loss if the price of the security increases between the
date of the short sale and the date on which the Fund replaces the borrowed
security. The Fund would realize a gain if the price of the security declines
between those dates. Until the Fund replaces the borrowed security, the Fund
will maintain daily, a segregated account with a broker and custodian, of
cash and/or U.S. Government securities sufficient to cover its short
position. At May 31, 1995, there were no Securities Sold Short outstanding.
At May 31, 1995, accumulated net unrealized appreciation on investments
was $12,452,401, consisting of $12,454,764 gross unrealized appreciation and
$2,363 gross unrealized depreciation.
At May 31, 1995, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see
the Statement of Investments).
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS SHORT-INTERMEDIATE GOVERNMENT FUND
We have reviewed the accompanying statement of assets and liabilities of
Dreyfus Short-Intermediate Government Fund, including the statement of
investments, as of May 31, 1995, and the related statements of operations and
changes in net assets and financial highlights for the six month period ended
May 31, 1995. These financial statements and financial highlights are the
responsibility of the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the statement of changes in net assets for the year ended November
30, 1994 and financial highlights for each of the five years in the period
ended November 30, 1994 and in our report dated January 11, 1995, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
(Ernst & Young LLP Signature Logo)
New York, New York
July 5, 1995
(Dreyfus Logo)
DREYFUS SHORT-INTERMEDIATE
GOVERNMENT FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 542SA955
(Dreyfus Logo)
Short-Intermediate
Government
Fund
Semi-Annual
Report
May 31, 1995
